Hepatitis C virus (HCV) establishes chronic infection in the liver of nearly 80% of those infected and in addition to causing hepatitis, may cause liver cirrhosis and hepatocellular carcinoma. These detrimental long-term sequelae of persistent HCV infection now comprise the leading indication for liver transplantation in the United States. Defining the elements of the immune response that fail or are insufficient to mediate HCV clearance or resolution in the majority of those infected is critical for advancing our understanding of how to therapeutically intervene in HCV disease pathogenesis. It is known in murine models that a subset of liver dendritic cells, pDCs, express the co-inhibitory molecule B7-H1 to mediate PD-1 dependent T cell dysfunction and that another subset, the mDCs, are capable of inhibiting T cell proliferation and inducing T cell apoptosis. Therefore we hypothesized that defects in DC function might contribute to the establishment of chronic HCV infection. In looking at DC populations in HCV-infected liver we observed: (i) a marked absence of a novel population of myeloid DC progenitors, (ii) an influx of mature DCs compared to uninfected liver and (iii) an activated DC population expressing high levels of T cell co-stimulatory and co-inhibitory molecules. Based on these data we now hypothesize that the chronic HCV liver microenvironment promotes the differentiation of myeloid liver DCs, and that these DCs skew HCV-specific T cell responses toward the induction of tolerance through B7-mediated inhibition and aberrant cytokine secretion. We now propose to study the effects of HCV infection on liver DC recruitment and activation and to test the capacity of liver DC subsets from chronically infected patients to process and present HCV-derived antigens to CD4+ and CD8+ T cells. These studies will identify potential defects in the functional DC response to HCV-infection, and will reveal potential targets for therapeutic intervention.